£5,000 Compounded: 20 years vs 30 years
Same starting amount, same rate — different horizon. Here's what extra time does to the final balance.
After 20 years vs 30 years at 5%
- 20 years: £13,266.49
- 30 years: £21,609.71
- Extra growth from the extra 10 years: £8,343.22
The headline insight: the extra 10 years isn't worth 10/20 more — it's worth 63% more. That's the non-linear compounding tail.
Full calculator pages
Why the tail is so big
Compound interest is front-loaded in absolute terms but back-loaded in growth. In the first 20 years, £5,000 grows to £13,266.49 — a gain of £8,266.49. In the additional 10 years that follow, it almost doubles again to £21,609.71, because each year's gain is percentage-of-a-larger-number. This is the reason that starting a pension at 25 rather than 35 is almost always worth more than working an extra year at the end of your career.
At different rates
- 3% (cash ISA long-term): £9,030.56 after 20y, £12,136.31 after 30y
- 5% (balanced portfolio): £13,266.49 after 20y, £21,609.71 after 30y
- 7% (equity tracker long-term average): £19,348.42 after 20y, £38,061.28 after 30y
Real vs nominal return
These figures are nominal — they ignore inflation. At 3% long-run CPI, the £21,609.71 after 30 years has purchasing power equivalent to roughly £8,902.92 in today's money. Compounding still wins, but the real-return figure is what matters for long-term planning.